Freehold Managers demands £210 to sublet, with an extra £120 for each new tenancy …

… And then it cites an Upper Tribunal case to justify its fees (although the case actually refers to a couple who paid £3.15 for the registration)
… oh, and it won’t discuss the matter further, with the clear implication that it take the issue to court.
Which is exactly what the leaseholder should do … after having paid the demand and denying its validity. Thereby not being in breach and not liable to Freehold Managers’ legal costs.

Freehold-Manager

Freeholders are determined to hold on to their subletting consent income in spite of the Upper Tribunal decision by George Bartlett, who ruled that £40 plus VAT was reasonable.

Here is yet another demand that exceeds that sum, and justification is a not-entirely-relevant case that actually pre-dates Bartlett’s ruling on January 5 2012.

Why the property tribunal is so feeble that freeholders can make a mockery of its rulings and routinely continue to demand payments that the courts have ruled that they are not entitled to, is one of the many absurdities of leasehold.

Here is an LKP reader’s latest predicament:

 Dear LKP,

I am a leaseholder with Freehold Managers PLC as my freeholders for a flat I own in Portsmouth.

In my lease deed it does mentions that underletting requires the approval of the freeholder (“such approval not to be unreasonably withheld or delayed”).

However, nowhere in my lease mention of any fee (or how it is to be calculated).

The Freehold Managers are now demanding me to pay them according to one of the two options they offer (made up out of thin air to extract as much as they can).

Under Freehold Managers’ scheme a consent fee (£90) and licence fee (£120) of registration (both one-off fees) plus £120 for each new tenancy agreement blessed by them, is required under their Standard Licence fee – Option 1.

Under their Option 2, the Global 5-yr licence fee is £400 + £60 per tenancy agreement

An excerpt from their response email follows below.

1. The standard consent fee is a one off payment of £210.00 that is broken down as £90.00 for the consent and £120.00 of the notice of registration. Once this fee of £210.00 is paid you are then only required to serve the Lessor with notice for every new tenant or tenancy agreements made in regards to the above property.

2. The global licence is a five year licence. If you know that you have different tenants every six months this licence could work out cheaper for you as the notice fee is reduced from £120.00 to £60.00 under the global licence terms. The breakdown of the global licence can be found on the back of the application forms we have sent to you previously. A global licence cannot be used for multiple properties.

As stated before the Standard licence is a one off fee for consent.

Please refer to The Upper Tribunal case reference LRX/170/2011 in our favour of consent fees.

Please be advised that we have explained our position and will not enter into any further correspondence regarding this matter as such we suggest you complete the application form and return with the relevant consent fee and tenancy agreement.

Kind Regards

The case cited by Freehold Managers is here

LRX-170-2011_Subletting in FMPLC Favour

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Comments

  1. AM says

    The problem is that a residents want “simple process= simple fee”, however not all leases are the same, and that is why fees can vary. In this case offering a scheme and options have to be checked in accordance with the lease, to see if it even chargeable or that the work “they do” is actually required under the terms of a lease. In some cases fees far in excess of £40 or even £90, are being upheld. The same applies to whether you need consent for a new letting, under the lease, or as some success has been had, by allowing the tenant to hold over, which seems to confuse them, for now (nb I have heard of some of these asset managing landlords offering a small fee in this case of £20 or £30).
    It should be noted that the notice registration fee IS outside of CLRA sch11 control and that us why as consent fees dropped notice fees went up, and a figure of £40 was mentioned as an indication but not something over which the then LVT or the UT had jurisdiction.
    I would
    a pay it
    b apply to the FTT to determine the cost

    AND argue that taking the overall cost of registration and consent should be considered, in that ” if they do x y z under the registration fee, what work do they then do at consent stage and how much should they be paid as reasonable sum in that light”.

    • AM says

      I would like to add that the £40 that LKP refers to was a decision that reflected that the lease under consideration by the tribunal required that the landlord do very little in the way of consent. It therefore determined that a; that work the landlord charged for that was not required and was deducted from their bill, and b; for what little they had to do, what a reasonable fee was. It is dangerous to then extrapolate £40 as being a fee that applies in all cases- as always the lease is King. In the interests of clarity ( see admin’s note) that means whatever an agent or landlord claims needs to be done should be checked against the lease, and then whatever cost they charge should then be reviewed as to whether it is reasonable. When it comes to notice/registration fees, there are no restrictions on this, unless the lease says so, and the FTT-PC has no ability to determine them.

  2. says

    AM who are you?
    Sebastian will give an email to contact through a third party.
    If you think you are helping, please confirm?

    • AM says

      I am me- my intentions sepak for themsleves on another site. What I am seeking to do is comment and add a broader context. Having been invoved in a number of these cases ( not on the landlord’s side) I would not want someone to make an application to the FTT-PC quoting £40 and this decision and hope that this would be sufficient to win the day. That is because,as the decision was quite clear in explaining, that the reasonable cost must reflect what the lease requires. Some leases require more sophisticated steps to consents which increase the costs. The applicant risks losing, in part as they have failed to anticipate and prepare to counter the arguments that a landlord will present, or as other cases have shown, that work the landlord claimed to do, and which might even be justified under the lease, they never did!

      In an ideal world I’d like to see a statutory form(s) of consent in leases to avoid the club sandwich approach to fees as in the £912 case on LKP, and simplify matters for all concerned.

  3. says

    AM
    Your intentions on this site are challenged, not on any another site.
    Who are you? what are your real intentions/point and if you wish to help state, who you are, what you see as the bigger picture, Sebastian knows my details?

    I would like to think that you mean well, but your way of stating what you are trying to state leaves me flummoxed and confused, at this moment you are given the benefit of the doubt, but unless you explain the real purpose of your comments, you will have lost me totally, and maybe others???